Government spends £1.8m on severance pay

Friday 26 April 2019

The Government spent almost £1.8m on severance pay and ‘golden handshakes’ for 42 members of staff last year - including three high-ranking officials who were given over £425,000 between them.

The latest look at the public purse has shown that £1,799,772 was spent on “exit packages” for 42 individuals who left the government, including former Chief Executive John Richardson, ex-Education Chief Officer Justin Donovan, and Julie Garbutt, who resigned as Chief Officer of Health.

The figures come as part of the Government of Jersey's Annual Report and Accounts 2018, published this week, which show that the government overspent its budget by £7million and could be headed for a far bigger deficit in the years to come unless the trend of higher spend than income is bucked in 2019.

Pictured: The majority of the severance payments made by the States last year were contractual entitlements of the individuals leaving their post.

Asked by Express, a government spokesperson has confirmed that of the total amount spent on “exit packages”, £1,556,441.56 relates to payments the individuals were contractually entitled to, including payments for redundancy and in lieu of working a notice period. 

The remaining £243,330 is what is referred to in the Accounts as “ex gratia”, which the spokesperson described as “payments mutually agreed by the employer and employee.” It’s understood that these are supplementary payments made on top of any contractual entitlement.

When it comes to the only named parties in the accounts - Mr Richardson, Mr Donovan and Mrs Garbutt - all three were only given money they were ‘contractually entitled to’.

The Accounts noted that Charlie Parker’s predecessor, Mr Richardson, “left office as Chief Executive [on] 6 November 2017 and received £130,803 as a contractual entitlement.”

Pictured: John Richardson, Julie Garbutt and John Richardson (left to right) were all given severance payments as per their contract when they left their post last year.

As at the end of 2016, the former States top dog was anticipating a pension of at least £3million after being in the post of Chief Executive for just five years before ‘voluntarily’ retiring early. 

The accounts also showed that his successor, Mr Parker, has accumulated £55,000 for his pension after little over a year in the job. Meanwhile, Director of Communications Stephen Hardwick has opted not to enter a pension scheme. 

The former Head of the Education Department, Mr Donovan, “resigned from his post and left office on 31 August 2018. He was contractually entitled to a payment of £102,805 plus £5,543 in lieu of holidays.” According to the 2018 accounts, Mr Donovan left the States having accumulated a pension of £142,000.

The Ex-Chief of Health received the most, however, receiving “a contractual entitlement of £93,820 and a further £93,820 in lieu of notice.”

Pictured: The States Accounts details how senior staff are paid in Government.

Due to the initials ‘JG’ being left unredacted in the ‘Root Cause Analysis’ investigating what went wrong to lead to the “disastrous” health worker salary uplifts worth £750,000, Express understands that Mrs Garbutt played a role in the job grade review which was subsequently reversed. 

She announced her resignation around the same time the investigation into the pay review was commissioned, saying she was leaving her post to look after her elderly parents.

Upon retirement, however, Mrs Garbutt will enjoy a pension nearing £2million, which is the highest out of all Directors employed by the States in 2018. 

It also appears from the States Accounts that by the time Mrs Garbutt was even better paid than the current Chief Executive, as a salary breakdown provided as part of the accounts indicated her annual salary was between £320,000 and £339,000. For the months worked before she left her post at the beginning of July 2018 without working her notice period, Mrs Garbutt was paid between £220,000 and £225,000.

Pictured: The 284 individuals who are paid more than £100,000 have salaries worth between £36million and £43million.

In addition to her severance package, this means that Mrs Garbutt would have been paid between £407,640 - £412,640 by the States last year, despite only being in her post for six months in 2018. 

The severance packages make up most of the £2,060,000 of “special payments” mentioned in the accounts - the remainder of which a spokesperson explained is made up of donations, insurance/legal settlements, health payments and other minor compensations.

Elsewhere, the accounts show that 284 individuals were being paid in excess of £100,000 - costing taxpayers between £36million and £43million at the upper end.

The Accounts/Annual Report also provide a breakdown of gender diversity in the government's workforce, showing a somewhat stagnant picture when it comes to recruitment.

Pictured: The gender split has stagnated between 2017 and 2018.

Between 2017 and 2018, the gender split largely remained the same, with men dominating more senior roles and the percentage of women in the higher ranks and director roles actually having gone down last year.